The president of Venezuela, President Nicolas Maduro, announced the launch of a cryptocurrency which will be backed by tangible assets such as oil, gas, or diamond and gold reserves. According to experts, Venezuela is likely turning to cryptocurrency to bypass the crippling sanctions imposed by the United States.

President Maduro did not reveal too many details regarding the impending launch. As a member of the Organization of the Petroleum Exporting Countries (OPEC), it is still unclear exactly how Venezuela orchestrated its coin, petro. However, the president seemed enthusiastic in his announcement and declared that Venezuela has arrived in the 21st Century.

Maduro, who is known for his leftist stance in politics, confirmed that petro would be backed by traditional assets such as gold and diamond reserves, oil, and gas. The president made his announcement during his regular five-hour long television broadcast slot. The broadcast also included Christmas celebrations in the form of song and dance.

According to Maduro, petro would be instrumental in helping Venezuela to enhance their economic stability, make financial transactions more convenient, and help the country overcome financial sanctions.

However, the announcement was met with significant opposition. Those in opposition to petro stated that the cryptocurrency is subject to approval by Congress, something which seems unlikely considering the political and economic upheaval the country has experienced as of late. However, petro could prove a much-needed solution as the Venezuelan fiat currency, the bolivar, has been in turmoil for quite some time now, as the country grows more desperate to fulfill their citizens’ basic needs.

If nothing else, the announcement perhaps proves how desperate Venezuela has grown ever since the financial sanction imposed by US President Donald Trump’s administration. The sanction has effectively prohibited Venezuela from participating in the international economic landscape.

The sanctions were imposed against all Venezuelan officials, the country’s debt capabilities, as well as PDVSA officials.

According to sources, all institutions in compliance with the sanctions have been scrutinizing any transaction linked to the country. A practice which has hugely hurt the country’s bond payments and oil export industry.

Bitcoin and other cryptocurrencies have had an unprecedented year in its growth rate, which has encouraged several mainstream financial institutions to embrace the future of cryptocurrency. However, cryptocurrencies have been attracting world leaders’ attention as well, especially in those countries with developing and damaged economic systems, such as Venezuela.

Since his announcement, several crypto experts and enthusiasts have spoken out against this decision, as the decentralized nature of cryptocurrency will be undermined once tangible assets back it. Venezuelan citizens have been increasingly drawn to the benefits of Bitcoin in recent years due to the country’s currency control policies.

The Venezuelan bolivar has decreased in value by over 57% in the last month alone, something which has been attributed to the country’s excessive currency issuing and controls. Currently, the Venezuelan minimum wage stands at $4.30.

Experts have argued that President Maduro’s proposed petro coin is unlikely to make any real difference to the millions of Venezuelan citizens crippled by poverty.

President Maduro, who formerly worked as a bus driver and union leader, has come under fire from economic experts. According to economists, Maduro refusal to overhaul Venezuela’s control has caused the financial system to collapse.

While Maduro aims to pay creditors and bondholders in petro coins in an attempt to lighten the country’s debt, his opposition maintains that this plan is likely to fail.

According to Venezuelan economist and lawmaker, Angel Alvarado, Maduro’s latest plan has no credibility. Also, the legislator, Jose Guerra stated that there is no future in Maduro’s proposed cryptocurrency.

During his televised broadcast this weekend, Maduro stated that Venezuela was currently in a financial war and that petro would be a way to fight the US-induced sanctions which aim to eliminate the country’s socialist policies.

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